Innholdsfortegnelse for December 2015 - January 2016 i Money Magazine

’Tis the season for making forecasts. According to some experts, the S&P/ASX 200 will hit 6000 points by the end of 2016. It’s had an exciting ride to date, even dropping below 5000. I’m always amused by some of the forecasts. If you want predictions that don’t rely on crystal-ball gazing, then Money’s chief commentator, Paul Clitheroe, sums it up nicely on page 12. Our economy is better than we want to believe. This Best of the Best edition, now in its 15th year, is about opportunities: the suburbs to buy into, the investment strategies to check plus all the award-winning products to help you reach your goals. A big thank-you to our research partners – Canstar, Morningstar, Lonsec, Zenith, SQM Research, SuperRatings and WhistleOut. Quality data and transparency are…

Through the rear-vision mirror, Paul Clitheroe enjoys looking at last year’s predictions and makes his optimistic calls for 2016 CRIKEY! HERE WE are again. It seems as if I was penning my views for 2015 only recently. Even so, I always enjoy reading back over my “predictions” for the year ahead. I was right when I said property markets should slow – but not fall in any major way – and that interest rates would be stable. It is pleasing my hope that we would have “a calm and rational conversation in our society about what services we want, what they will cost and how we raise tax more fairly to pay for what we want” seems have become a reality a little faster than I had expected. This is…

THE GREAT $20 ADVENTURE Effie Zahos Bauer Media Group RRP $14.95 Ideally, financial literacy is taught early in life. While your eight-year old isn’t going to dabble in shares or invest in property, it certainly won’t hurt to address the fundamentals such as saving and setting goals. A recent ANZ study reported that 18- to 24-year-olds are more disconnected than ever from money issues, so the learning should never really stop. Money editor Effie Zahos has just released her first children’s book, The Great $20 Adventure, written for the age group of two- to 10-year-olds. Main character Max takes the reader on an adventure with $20 he has received from Grandma for his birthday, learning some valuable lessons along the way. Paul Clitheroe, chairman of the Australian Government Financial Literacy…

Do you use your car for work? If so, you should claim a tax deduction for all those journeys you undertake while on business (excluding the commute between home and work). Until recently, there were four ways of working out your tax deduction for work-related car use, of varying degrees of complexity. However, from the current tax year there are only two: • Cents per kilometre. This is the simplest method but is available only if you use your car for less than 5000 business kilometres a year. Basically, you claim a set figure per business kilometre travelled. In the past, there were different rates depending on how powerful your car’s engine was. Now there is only one rate – 66¢ per kilometre. • Log book. You basically claim a…

Q I’m 60 and was retrenched from the TAFE sector after 25-plus years. I have a mortgage, after a failed marriage, of $270,000 and can access my super, which is $290,000. I have a portfolio of shares valued at about $20,000. My casual work lasts week-to-week and covers my repayments of $1700 a month. Should I pay off my mortgage and hope my casual work will continue, or reduce my mortgage and my repayments to have some extra cash, or is there another option to stay afloat? A This is a tough one. I have tossed and turned on the best way for you to go. I hate pulling money out of super as it should earn more than the interest on your mortgage, but I sense the stress in…

Knowing that “just saving” wasn’t going to hit this young family’s goals, we needed to look at something more tailored to the time frames, risk profiles and knowledge bases of the clients. We settled on a strategy we call “debt recycling” – simply put, this draws an investment loan (tax deductible) against the family home, which is then used to invest in growth assets (shares and managed funds). All income generated by the investments and tax savings are then paid directly into the home loan (not tax deductible). This obviously pays the home loan down at a faster rate, so we “redraw” those additional savings and allocate that towards buying more growth assets. Theoretically we’re transferring non-deductible home debt into tax-deductible investment debt, which in turn produces more income to…

THE AUSTRALIAN SECURITIES & Investments Commission (ASIC) is cracking down on interest-only loans. After an eight-month investigation, the regulator found many lenders had been falling short of legal standards in assessing applications. I’m all for responsible lending and in most cases I’d say you should pay principal and interest (P&I) on your loan. But let’s be real here. The combination of negative gearing and concessional capital gains tax means interest-only (IO) loans can make sound financial sense. Here are three strong reasons to pay interest-only: Flipping your home loan When you flip your home into an investment you want to be able to claim the highest possible tax deduction. Paying P&I while it’s a home loan will reduce later interest payments and hence the possible deduction. Smartline mortgage adviser Scott…

Running a successful business is rewarding but it can also be a complicated, difficult experience. From managing employees to taxes, marketing and customer relations – there’s a lot to consider. Your IT situation is one more thing to worry about, which is why it’s important to choose a supplier that make running your business easier, not harder. A technology supplier should be an extension of your business, not simply a provider of the tools and services you need. By choosing a supplier with a reputation for excellent customer service and high-quality products, you’ll have access to your own around-the-clock IT support and the latest business solutions. Liz Fotiou, marketing manager, iiNet Business…

In recent weeks we’ve seen a major divergence between the banks and the Reserve Bank that has many borrowers wondering what’s going on. Pressure from the Australian Prudential Regulation Authority requires banks to hold more capital, so they’ve increased interest rates independently of cash rate adjustments. But the RBA is under pressure to revive a sluggish economy no longer buoyed by strong investment in the mining sector, so a reduction in the official cash rate is more a question of when, not if. The banks are moving in one direction, the RBA in the other. In times of uncertainty, it’s important to reflect on your mortgage situation and seek advice to ensure the best possible deal for you. The opportunity to refinance with a more competitive lender, or fix your…

BT Smaller Companies Fund’s tried-and-tested formula makes it a premier small-cap option. Managers Paul Hannan and Noel Webster, two very insightful investors, lead an extremely experienced, competent team. This is reflected in the fund’s stellar record of outperforming the index in all market conditions. Its portfolio is more diversified than most, typically holding 60 to 90 names, reducing vulnerability. There is no performance fee, which is a further positive, making BT’s fund an outstanding choice. FACT FILE BT Smaller Companies Fund APIR code: RFA0012AU Start date: August 10, 1987 Annual fee: 1.62% Morningstar analyst rating: Gold Minimum initial investment: $5000 Three-year return to September 30: 10.73%pa…

Sloppy SMSF documentation can leave you and your fund owing the tax office a lot of money, advises Townsends Business and Corporate Lawyers. “We continue to be surprised by the poor quality of documentation relating to SMSF pensions, including no or defective pension applications and agreements, no or defective trustee minutes and even trust deeds that don’t empower the trustee to pay account-based or transition-to-retirement pensions,” says Peter Townsend, a principal of the business. He says it is crucial to check the trust deed and follow it to the letter. If there are problems with the contents of the trust deed, it may be possible to amend the deed or governing rules. “If the pension documents are not correct and in place, the pension may not have been effectively created,…

AS WE KISS GOODBYE TO 2015 and welcome the new year, what will 2106 hold for markets? Will we view higher US interest rates as good or bad news? Will China’s sharemarket volatility re-emerge? Will slow economic growth in Australia mean slow growth in dividends? Which companies will benefit from the lower Australian dollar and the recent free trade agreements? Is China’s slowing growth a serious issue for our economy? Will oil prices stay low? Will we face an early federal election? So many questions! Time for some answers. Strange as it may seem, rising US interest rates are good news. Companies in the US are expanding again. They are creating jobs, making profits and paying tax. The US’s Dow Jones Index may have a soft start to the year…

PUTTING TOGETHER a Best of the Best edition is no easy task. We’ve been doing it now for 15 years but that doesn’t make it any less of a challenge. Our methodology needs to be watertight, our research partners need to be certain their data is correct and, most importantly, we have to be confident that it all makes sense. This year I took a step back and let Money’s deputy editor, Maria Bekiaris, take control. Together with our seven research partners Maria and the team have put together what I like to call “your ultimate guide to financial products”. Our objective for this awards issue is simple: to take the hard work out of choosing the best possible products so that you’ll end up with the ones that will…

GOLD WINNERS PERENNIAL AND PIMCO These funds suit investors who want better returns than those available from bank accounts but don’t want to take on a lot of risk. Two funds topped the category. Perennial Fixed Interest Wholesale, a three-time winner, was recently acquired by Henderson Global Investors but the Perennial team is staying. It typically holds 50 to 100 domestic securities. “A sensible approach and a capable team leaves the fund well placed to outperform the benchmark and rivals in the long run,” Morningstar says. “Its fair-value model identifies opportunities by comparing the market with where the team thinks interest rates should be.” The PIMCO EQT Wholesale Australian Bond Fund, which came third last year, is a domestic fund but can invest up to 30% offshore and 30% in…

GOLD WINNERS NOVAPORT, PENGANA AND SGH If you invest in small companies, be prepared for short-term volatility. But longer term, say three years, most of our placegetters have produced double-digit annual returns. Three funds have tied for the top spot. NovaPort Wholesale Smaller Companies holds 30-35 stocks and the manager’s approach is to pay a reasonable price for companies with an improving profit-growth profile. “The quality in terms of the team and its track record cements our view that NovaPort is an excellent small-cap choice,” Morningstar says. Pengana Emerging Companies, joint second last year, holds between 50 and 60 stocks. “It’s a superb option for investors wanting small-cap exposure avoiding the resources sector,” Morningstar says. “Its approach is to identify cheap growth in small companies.” SGH ICE, also joint second…

GOLD WINNER VANGUARD With interest rates so low, keeping the fees right down on your income investments is more important than ever. Vanguard is the investment industry’s leader in the low-fee department and Vanguard Australian Fixed Interest Index ETF wins our gold award. The fund invests in a quality, diversified portfolio that holds commonwealth government, state government and treasury corporation bonds – about 72% are rated AAA and 20% are rated AA. It also holds about 8% in investment-grade corporate issuers that have a credit rating of A or BBB. All up, there are 476 bonds from 184 issuers. The ratings are by ratings houses such as Standard & Poor’s and the fund tracks the Bloomberg AusBond Composite 0+ Yr Index. It suits investors who want a stable, quarterly income…

GOLD WINNER ANZ ANZ and CommSec continue to battle it out for top spot in this category, with ANZ regaining the crown after placing second last year. What set ANZ apart this year is the higher number of shares outside the ASX 200 on which it offers margin loans, says Mitchell Watson, research manager at Canstar, our research partner for these awards. As the table shows ANZ has close to 170 more approved stocks than runner-up CommSec. ANZ customers who qualify as holding a diversified portfolio of at least four approved securities, with no more than 25% of the portfolio in one stock, can borrow against securities on the more extensive approved list, including many small and mid-caps. CommSec says its loan provides online tools including real-time loan prices and…

GOLD WINNER FP MARKETS Its long-held custom of not penalising investors who prefer to trade over the phone, rather than online, has helped First Prudential Markets take out this award for the seventh year in a row. As all other online brokers charge a premium for trading over the phone, FP Markets has carved out a niche. And, as seen from the table, the gap between it and other brokers for phone trading has widened, with FP’s fee now less than half that of its closest rival. Last year the gap was about 25%. Apart from cheaper fees, the broker has a strong list of features which earned its IRESS investor platform a four-star rating from Canstar. This includes a comprehensive education offering. Free to all clients, it comes in…

GOLD WINNER FIRST STATE SUPER First State Super High Growth (employer sponsored), with its low cost and strong performance, is our top fund. It is one of Australia’s biggest super funds with 750,000 members and $52 billion under management. For the high-growth, premixed diversified option, the fee is kept at a low 0.4%pa, plus a 0.08%pa performance fee, by holding index funds as a core investment and smaller holdings of active funds. The fund has most of its assets in local and international equities, listed and unlisted property, private equity, infrastructure and hedge funds. It also employs “real return” strategies. It has just 10% in defensive assets including bonds, bank bills, credit securities and cash. If your time horizon is long and don’t mind volatility, growth investments bring higher returns.…

GOLD WINNER CARESUPER MySuper funds are simple, low-cost vehicles that were introduced by the government in January 2014. This year CareSuper wins for its default balanced fund. “The overall benefit provided to CareSuper members, including the fund’s flexibility of products, has been very strong this year,” says Adam Gee, chief executive of SuperRatings. CareSuper Balanced has a broad investment mix of alternative investments as well as local and global shares, property and fixed income. The investment management fee of 0.92% is below the MySuper funds industry average of 1.1%. The admin cost is $78pa plus an asset-based fee between 0.15% and 0.2% (capped at $500). The fund offers financial planning advice either over the phone at no cost or face-to-face for a fee. It also has cost-effective banking products, such…

Insurance in super is usually a simple product. And paying for insurance within super is typically cheaper than buying it privately, says financial consultant Rice Warner. This is because of its tax efficiency, as you use money that is taxed at 15% rather than at your marginal rate, which is likely to be higher. It is also bought without paying commission to an adviser. Moreover, big super funds use their economies of scale to buy it at cheaper, wholesale prices. Remember that insurance comes out of your retirement savings and you need to take this cost into account if you are doing long-term calculations of how much money you will have. You may even need to top up your super, particularly if you are buying additional life, TPD and income…

GOLD WINNERS MERCER AND NABTRADE A big unknown for retirees is how long will they live. Nearly half of all Australians aged 50 to 80 are worried about longevity risk – one in four will live beyond the average life expectancy and outlive their superannuation savings by 10 years, according to Mercer. Mercer has come up with a pooled mortality investment fund, LifetimePlus, that is designed to protect people against the risk of outliving their savings and falling back on the age pension. Mercer LifetimePlus, which Money has named Best Innovative Retirement Product, has an investment option added to an account-based pension within a superannuation account. For example, retirees contribute about 25% of their retirement benefit to Mercer LifetimePlus: for example, if you invest $100,000 from a $400,000 super balance…

POCKETBOOK Cost: free OS: iOS and Android Budgeting apps are a must if you’re serious about saving. Pocketbook is one of the best on the market – it syncs with your various transaction and savings accounts and documents immediately when money is coming in and, more importantly, when it is going out. You’re able to group and store your bills and you can also categorise your purchases. AUSTRALIAN TAX OFFICE Cost: free OS: iOS and Android The tax office’s app has a handy new feature that can help you keep track of your taxable deductions. MyDeductions allows you to record them on the go, as you go. Mobile phone calls have until recently been one of the hardest deductions to prove but now you can document the exact time and…

GOLD WINNERS BANK UBANK NON-BANK NEWCASTLE PERMANENT To fix or not to fix? That is the question. The answer? Well, that depends on where you think interest rates are going. The average standard package discounted variable rate offered by our placegetters on page 100 is 4.16%. The winning loans here have three-year fixed rates as low as 3.89%. So if you think rates will continue to drop you probably won’t lock in. But here’s the catch: just because the Reserve Bank may cut rates doesn’t mean lenders will. According to our research partners, home owners are getting toey about locking in, even though we get it wrong 50% of the time. (See The Buzz on page 14.) Locking in is all about peace of mind and at 3.89% our non-bank…

Keep a clean credit file Having been a mortgage broker at the tender age of 23, I can attest that it’s not a job for the faint-hearted. However, I’ve seen many a loan declined due to credit problems – be it defaults, low scores, etc. My advice is this: always (!!!) make sure that your credit file is in order. Why? Banks will decline your application. So if you know that you have an unpaid default, pay it and make sure that your explanation is believable. Life does happen, and lenders do want your business, but if you’re too risky your loan will be declined (due to the mortgage insurer not liking the deal or whatever reason). Frank, email No cash to sacrifice Everyone talks about salary sacrificing into super…

Home loan rates are on the move and, for those with a largish debt, these apparently small adjustments can translate to a difference of tens or even hundreds of dollars in your repayment each month. Many banks have increased their variable interest rates for owner-occupiers since mid-October (and the move upwards for investors starting several months before that) and borrowers wonder more and more whether now is a good time to fix. Canstar's analysis of more than 160,000 home loan product searches on its database in 2015 has found a definite move away from variable home loan products by potential borrowers towards one- and three-year fixed-rate loans. In March this year, more than 43% of visitors to our site were looking for a variable loan, compared with fewer than 35%…

Home loan packages generally combine several products into a single bundle, often lumping you with products that you’ll never use but you’re happy to receive if it means you get that all-important package discount. Don’t get me wrong, the discount can be quite lucrative but it does cost around $400 in annual fees, normally. P&N, Western Australia's largest member-owned bank, has launched Home Loan & Bag, a product that makes a lot of sense. The thinking behind it is this: why not let consumers choose the products they want? And – even better: If we have their home loan, why not give then a credit card with a purchase rate that’s the same as their home loan rate? The product is simple: you get a low-rate variable home loan (4.15%)…

ServiceM8 Cost: free OS: iOS only ServiceM8 (“service-mate”), a cloud-based business administration service, has released an iPhone app to help small businesses manage their affairs on the go. Whether logging a new job or sending an invoice, ServiceM8 allows business owners to be in constant communication with employees and clients. Not sure how to get to the next job? Connect to GoogleMaps directly from your activity feed for directions. A handy feature is the instant quoting and invoicing. You can list all the tasks required to complete the job on the pre-loaded invoice, including photos. As soon as you finish a task listed on the quote, you can check it off, which sends it straight to the invoice. Once the job is done, you can digitally sign the invoice with…

ADAM MOONEY Adam Mooney, 47, CEO of Good Shepherd Microfinance. Lives Bullengarook, north-west of Melbourne. Formerly in senior roles with Reconciliation Australia and prior to that senior executive with ANZ Bank and Merrill Lynch, including chief financial officer. First job, holiday work as a builder’s labourer, age 15. IT’S THE BUSY SEASON for Adam Mooney and his staff right now. Good Shepherd Micro-finance will see a 20%-30% spike in demand for loans from now through January – but these will have little to do with Christmas. His not-for-profit finance institution lends only for essential items, so gifts, food and other festivities are out. For them, increased demand has all to do with families under pressure gearing up for the school year: uniforms, iPads and laptops, maybe upfront payments for school…

The incorporation of forward-thinking technology is taking the finance world by storm – so much so that a new breed of technology-focused financial start-ups (“fintech” for short) has emerged to change the way local consumers manage their money. In doing so, they are slashing, or in many cases eliminating, wasteful bank fees and charges. For example: • Currency transfer fees will be a thing of the past thanks to the arrival of peer-to-peer (P2P) currency transfer services such as TransferWise and CurrencyFair. These fintechs match people looking to swap currencies and their fees are 70%-90% lower than bank fees. • Investment fees are a drain on our savings and cost us $23 billion a year. Australia’s first automated investment service, Stockspot, is taking on the world of high investment fees…

Avoid festive financial strife this year by following these few tips to make sure Christmas is about only family, friends and fond memories: 1. Set a budget and stick to it. The Christmas tree can still be full of gifts, even if they all come within budget. 2. Shop with what you’ve got. Avoid dipping into savings or using credit cards to buy gifts with money you don’t already own. 3. If you do shop on a credit card, pay it off quickly and within the interest-free period, otherwise your budget will automatically blow out because of the interest owed on your credit card. 4. Better still, shop with loyalty points or on rewards programs. If you never use your rewards program, make the most of it at Christmas and…

DO YOU HAVE A CAUSE THAT YOU are passionate about? Do you involve your children in it? Giving to a charity can strengthen families. As soon as you start giving kids money, teach them about saving part of it for a good cause. Tabitha Lovett, the general manager, philanthropy, at Equity Trustees, often asks people who are keen to donate which are the issues in life that trouble them. “I ask, ‘What are the causes that you feel you need to support? What does your family want to be connected with?’ ” Giving to a good cause will develop family togetherness. “They are talking about the world, about equity, disparity and helping. People think how fortunate they are,” Lovett says. There are many causes: sick children, remote indigenous communities, refugees,…

If you’re nervous about residential property, why not consider an investment in the commercial property sector? Record low interest rates have driven demand for the sector from local investors looking for income and relatively stable capital preservation over the past 12 months. And the weaker dollar has underpinned strong offshore demand for Australian assets. Australian property securities funds have performed strongly. SQM Research’s review of the domestic property securities sector shows that the S&P/ASX 200 A-REIT Accumulation Index’s total return was 20.3% in the 12 months to June. But SQM warns that 2015-16 may not be as rewarding. Volatility in markets looks set to continue, given local and global uncertainty. Perhaps an indication of slowing was the annual return for the sector to the end of August – 14.2%, down…

A defensive investment strategy is one that aims to preserve capital regardless of market conditions. As media and other commentators focus on uncertainty created by macro risks, we believe investors should consider strategies that actively focus on capital preservation and still deliver strong risk-adjusted returns. A key tactic is to focus on less volatile “defensive” or “economically insensitive” industries. While no security is a sure thing, risk can be minimised by selecting companies whose key drivers are insensitive to the economic cycle. At Pengana, we call these “toilet paper and toothpaste” companies, as no matter what the conditions people will still buy these staples. So their earnings are easier to forecast and value. Examples include healthcare, utilities, telecommunications and even gaming stocks. Holding cash is another tactic many investors underestimate…

THE IMPACT OF A TERROR attack is to drive fear – uncertainty even – into the hearts of the people at whom it is aimed. In the case of the Paris attacks, it was quite clearly a retaliation for French air strikes against Islamic State, or ISIL, in Syria and Iraq. The sharemarket reaction is understandable but short-lived. Often the government response to such events lifts an economy and boosts the market in the short term. Extra spending on defence and on rebuilding confidence can be positive – the opposite of what the terrorists sought. The first major shock that created the long-term war going on in Iraq and Syria was the September 9, 2001, attacks on the US by al-Qaeda. But the 15% fall in the US stockmarket in…

One of the biggest drivers of ASX stocks’ performance in recent years has been the relative outperformance of the US economy over ours and a weakening $A:$US exchange rate. So companies with $US earnings and cyclical leverage to that economy have generally outperformed. Despite some significant moves, we expect this trend will continue. The US economy is steadily chewing through excess capacity and the unemployment rate has fallen to near 5%, while Australia is struggling with the drag from the fading mining boom. So the US Federal Reserve is likely to raise interest rates later this year or early next year while the Reserve Bank is more likely to cut. These interest rate moves and ongoing weakness in China’s steel demand, which is keeping downward pressure on the price of…

SEEK AND EDUCATION AUSTRALIA, a company owned by 38 local universities, jointly own IDP Education. IDP will list on the ASX under the stock code, IEL, possibly in December. Education Australia has agreed to hold its 50% shareholding in escrow until the release of the 2015-16 results in August. At the time of writing, Seek was yet to determine how much of its 50% stake it intended to sell in the initial public offering (IPO). However, it seems likely it will exit the business if the offer price is set near the top of the $2.40 to $2.65 a share range. IDP has four business units. The English language testing and student placement divisions account for more than 90% of the company’s revenue and gross profit. The English language teaching…

LET’S SAY THAT BECAUSE OF circumstance, necessity or desire you take on the responsibility of looking after a lump of money. Maybe you have been divorced, bereaved or have inherited. Where do you go for advice? The most common options are: The family member Ah, probably not a good idea, putting your future in the hands of an amateur. Sorry, but if you know nothing about the stockmarket, are you really in a position to judge whether a family member’s investment style or experience are appropriate? Enthusiasm and goodwill are no substitute for ability and I would question the financial wisdom of anyone who puts themselves forward and in so doing exposes themselves as someone who doesn’t know the basic certainty of financial life: family and money don’t mix. Trust…

THE KEY THEME likely to dominate financial markets is the inevitable rise in US official interest rates. Chances are high that the US Federal Reserve will begin raising rates at its December policy meeting and further “gradual” rate rises will follow in the new year. Meanwhile, it’s not yet clear that the European Central Bank, the Bank of Japan or even the Reserve Bank of Australia have finished their own easing cycles given their economies continue to lag. All this suggests that a firmer US dollar is likely to still be a feature next year. History suggests that global equities tend to struggle over the first three to six months of Fed tightening cycles. But they may well end up higher over the full 12 months due to continued strength…

GOLD WINNER RUSSELL Russell dominates this category for the second year in a row, with its Balanced A and Diversified 50 A funds taking equal top spot. Last year they were joined by a third Russell fund. These funds give investors exposure to a number of different asset classes. Russell Balanced A is for investors looking for longer-term growth and willing to accept moderate to high volatility. It invests predominantly in growth assets and, at the end of September, held 27% in Australian shares and 30% in international shares, with 29% in cash and fixed interest. Russell Diversified 50 A has a 50-50 exposure to growth and defensive assets, with about 49% in cash and fixed interest, about 19% in overseas and shares and 18% in local shares. Both funds…

GOLD WINNERS BENTHAM AND MACQUARIE This is the category for investors wanting strong returns over a longer-term horizon of at least three years. Two funds share top spot. Bentham Wholesale Global Income, a joint winner last year, gives access to global diversified opportunities that are not usually available to direct retail investors. “Bentham Global Income’s high-conviction process allows its astute team to shine,” Morningstar says. “The team distinguishes itself by diligently identifying the particular nature of individual risks it seeks exposure to and sticking firmly to its judgement regardless of market noise.” Macquarie Income Opportunities, which came second last year, gives exposure to a diversified portfolio of credit-based investments. “The inexpensive Macquarie Income Opportunities manages credit risks prudently, which sets it on the path for long-term success, in our opinion,”…

GOLD WINNERS BT Consistently strong performance from real estate investment trusts (REITs) has resulted in property security funds, which mainly invest in REITs, providing very attractive five-year returns. The winner, BT Wholesale Property Securities Fund, placed third last year. It offers investors access to a professionally managed portfolio of A-REITs and property-related businesses across all major geographic regions and within all major property sectors, says Louis Christopher, the managing director of SQM Research. “Its core investment style is to seek out mispricing opportunities in both ‘value’ and ‘growth’ A-REITs,” he says. “There is a focus on rigorous research and assessment of property fundamentals. Overall, an experienced and stable investment management team with a robust investment process and access to the broader resources at BT are key strengths of the fund.”…

GOLD WINNER VANGUARD Broad tracking of the largest 300 Australian shares and property trusts has helped Vanguard’s Australian Shares Index ETF win this year’s award. This low-cost, liquid, passively managed listed fund covers about 80% of the sharemarket and gives exposure to more mid-cap listed companies than some competitors. The strategy protected Vanguard’s fund from the worst of the downturn in the banking sector – 20% since March – which hit heavily funds that hold a narrower universe of top shares. Its return is boosted by a low fee of 0.15% a year, around half that of most competitors, such as the BetaShares Australian Top 20 Equity Yield Maximiser (0.59%) and the UBS IQ Research Preferred Australian Share Fund (0.7%). The Vanguard fund’s tax-effective gross distribution yield of 4.1% in…

GOLD WINNER VANGUARD Australian investors have been rewarded for going global and holding shares denominated in the strong US dollar. Vehicles for achieving these higher returns include two of Vanguard’s highly diversified, low-cost global ETFs, which share the gold award this year: the All-World ex US Shares Index ETF and the US Total Market Shares Index fund. If you want exposure to the world’s technology giants – such as Apple, Google and Microsoft – the Total Market Share fund gives you exposure to virtually the entire list of investable US shares – large, mid-size and small companies – for a 0.05% annual fee. This means you pay $5 a year for each $10,000 invested to cover expenses. The fund tracks the CRSP US Total Market Index, which includes some 4000…

GOLD WINNER COMMSEC CommSec has proven once again that it’s the best online broker – as well as the biggest – in the country, taking out this award for the ninth year in a row. “By offering advanced charting tools, exceptional client services and support, CommSec has defied strong competition to win again this year,” says Max Lin, research analyst with Canstar. “The broker also sets itself apart from its competitors in education by providing online seminars, workshops and relevant educational material to equip its clients with informed trading knowledge.” CommSec’s managing director, Paul Rayson, says: “We strive to provide the tools, guidance, research and support to help Australians invest online with confidence. “We recently relaunched our international trading platform to make investing in international shares easier and more affordable,…

THE FIRST THREE months of the 2015-16 financial year have been a challenging time for super fund members: the median balanced fund has fallen 1.6%. However, this does come on the back of strong positive returns over the past five years – since the depths of the GFC. When you see double-digit returns on your super account each year, it would seem to be doing fine. However, if most other funds have been doing substantially better, is it really doing well enough? Being engaged with the progress of your superannuation fund and your particular account is vital. This is the best first step you can take and it could pay big dividends for you at retirement. If we look at balanced options, which is where most people are invested, over…

GOLD WINNER VICSUPER The VicSuper FutureSaver Capital Stable fund was boosted by strong returns from its overseas and alternative investments. As well, members benefit from the low fees charged by its core portfolio of index funds. VicSuper is a $15 billion former Victorian public sector fund that was opened to everyone in 2000. It now has 240,000 members. VicSuper uses environmental, social and governance (ESG) factors in its investment process. The capital stable option uses a majority of index or enhanced index managers as the core, with satellites of active fund managers. The asset allocation set by the fund and consultant Frontier Investment Consulting assigns 40% to growth assets, with 14% in international shares, 9% in local shares and 5% in emerging markets. Real assets, including infrastructure, property and agriculture…

GOLD WINNER LOCAL GOVERNMENT SUPER This year’s winner, Local Government Super Fund (NSW), has taken many responsible and sustainable investment initiatives, cut fees and improved member services. A regular winner of this category, Local Government Super was the first super fund to divest its coal investments because of the climate-change risks posed by the industry's heavy carbon emissions and the financial implications of this. Local Government Super follows the environmental, social and governance (ESG) guidelines set down by the Australian Council of Superannuation Investors and MSCI research, which analyses risk and performance, on local and international listed companies. LGSF does not hold Transfield, which is in the news for its role in running detention centres, as it does not meet the fund’s ESG requirements. Fund members can now see on…

GOLD WINNER ANZ The ANZ Smart Choice pension, with either a lifestage investment or your own personalised mix, wins for the second consecutive year. The fees are low: a flat $50 a year for administration, around 0.5%pa on investments, and no fees on cash. The total cost of $1300 for managing assets of $250,000 compares with the average $3123 charged by super funds and the average $2354 charged by industry funds. When you reach your preservation age, which depends on your date of birth, you can start a transition to retirement (TTR) pension and, if over 60, an account-based pension. Investments in the lifestage option are rebalanced as you age. If you were born in the 1940s, 80% will be in defensive investments and only 20% in growth investments. If…

Investors seem keen to buy international shares – but not many do anything about it. The monthly Investment Trends’ investor intention index has found that the net intentions of online traders for international exposure has been high since 2013 and even edged ahead of those for domestic equities a few times in 2015. In contrast, Australian active traders’ ownership of direct international equities is the lowest among the seven key economies surveyed by Investment Trends, with 14% of traders holding them, compared with Germany’s 60%.…

GOLD WINNERS BANK ING DIRECT NON-BANK QUAY CREDIT UNION Last year’s bank and non-bank winners have triumphed again, with ING Direct and Quay Credit Union taking out the big awards this year. What makes a good everyday account? Julie Nguyen, a Canstar research analyst, says fees and access are the most important things to consider when you’re looking for an everyday account. “With fees in 2015, a large portion of people can get away with paying no fees, and that includes ongoing and transaction fees,” she says. “When it comes to access, online and mobile banking are becoming our go-to for our everyday banking, so a strong and flexible banking platform is important.” ING Direct’s Orange Everyday account is packed with extras, such as 100% ATM rebates and 2% cashback…

GOLD WINNERS BANK RURAL BANK ONE NON-BANK NEWCASTLE PERMANENT Competitive rates determined our best savings account winners for 2016. At a current 2.6% a year with a history of good rates, the Rural Bank ONE Personal Saver took out first place. With no transaction or account-keeping fees, a deposit of $5000 could make a nifty $280 in two years. In terms of access, Rural Bank ONE allows you to transfer your funds to any other bank account and it has an innovative way of doing this. The account’s PayAnyone service requires you to use a security token when processing a payment, which ensures your money is delivered securely. A five-year token costs $25. Newcastle Permanent’s Online Savings account has won our non-bank award for the fourth year in a row.…

GOLD WINNERS BANK SUNCORP BANK NON-BANK FIRST OPTION CREDIT UNION Developing smart saving habits is important for children in an increasingly cashless society, where it’s so easy to spend on a card. And before your kids start part-time or casual work, it’s important for them to understand the importance of goal setting and budgeting. Last year’s top-ranked accounts have again proved the best of the best. Suncorp’s Kids Savings Account total rate of 3.5%, encourages saving with a low monthly deposit and its restriction on withdrawals. Our non-bank winner is the First Option Credit Union Kids Bonus Account, which has claimed this award for the third time in a row. With a stellar total rate of 5.15% a year, most of us in the Money team are wishing we were…

GOLD WINNERS BANK HERITAGE BANK NON-BANK FIRSTMAC The days of the GFC, when banks were eager to attract the savings of Australian depositors because offshore funding was difficult to access, have long gone – and with them the high term deposit rates we enjoyed. Nevertheless, the products still have their place for investors – somewhere to park cash for a while, preserving your capital and keeping at least a nose ahead of inflation. Heritage Bank takes out our award for best short-term deposit with an advertised rate of 2.75% for $25,000 for three months. There are no fees, only penalties if you change the timing of your interest payouts. And there’s no need to worry about your rate plummeting – it is guaranteed for the term. In three months your…

GOLD WINNERS BANK HERITAGE BANK NON-BANK NEWCASTLE PERMANENT By packaging all your banking needs with the one financial institution you can save some serious coin. A package home loan combines your mortgage with a credit card, transaction account and maybe even home and contents insurance. You’ll lock in an instant discount of about 0.9% on your home loan. A package fee of around $400 a year generally applies. Our research partner, Canstar, says that on a $500,000 mortgage you can save about $3718 in the first year and $3370pa after that. The smaller the mortgage, the smaller the savings. On a $150,000 loan expect to save around $986 in the first year and $638pa after that. In this case you could be better off with a rock-bottom-rate home loan that…

Poor deserve a share of wealth I appreciated Paul Clitheroe’s comment that “better lives for the poor are better for everyone” (In Your Interest, November). I truly think this is forgotten by many. While I am keen to expand my personal wealth/assets I am also reminded every day when I go to work as a social worker of a saying I once heard: a country is only as good as it treats its poor. If we want to expand our own wealth at the expense of others (unfair or inequitable government/financial policies favouring those on higher incomes) then I would rather not, due to the weight on my conscience. It’s easy to forget the barriers that people and children growing up in inter-generational poverty face both financially and personally –…

The short answer is yes. However, there many rules and traps to watch out for if you are considering such a project. In respect of the costs of renovation, payments for materials and labour generally can only be made by the fund and not by the fund member or a related party. If any of the labour is carried out by the fund member or a related party (for example, the fund member or their relative is a builder), this must be authorised by the trust deed. Furthermore, these people should have the appropriate skills to carry out the work and they would need to be paid a commercial rate for their services. Finally, the financial aspect of such a project may not be suitable for an SMSF, given that…

This is a great question to consider, as many pensioners think they can’t participate in the workforce once they’ve retired. The good news is that they can. The work bonus is an incentive for pensioners so that taking up short-term or seasonal work will lessen the effect on your payment rate, if any. It allows the first $250 of your employment income to be disregarded by the income and assets test. If, in any given fortnight, your income does not exceed $250, the difference will be added to your work bonus balance – up to the full $250 if you don’t work at all – which can accrue up to a maximum $6500. This means if you only work for a certain period of the year, perhaps marking exam papers,…

Peer-to-peer accommodation website Airbnb recently launched a new “fintech” program to add to its successful operations. In November it announced a new partnership with American Express, where holders of Amex cards can sign up, log in and book with Airbnb through their Amex account. Amex rewards have also been extended for use with Airbnb rentals, so you can save up and use points for your travel accommodation. At present the facility is only valid for US-issued cards but it is likely to be rolled out across the globe. It is expected Airbnb will announce a similar partnership with MasterCard in the US, after a test web page detailing a new Airbnb-MasterCard rewards scheme was made live accidentally on November 7. ANZ owes bonus interest It hasn’t been a good year…

Q I am 25 years old. I have $15,000 in savings, $8000 in super and that’s pretty much it. I earn between $560 and $610 a week working part time. I feel very far behind others my age. I try to save around $200 a week. I would like to buy a property in Sydney in a few years. Do you have any advice for me? A Well, it may or may not make you feel any better, but at age 25 I owned a Datsun 1000, worth around $300. Fortunately I did have a job and so could eat, pay rent and have a few beers with my equally destitute mates. Clearly you have far more financially astute friends than the typical 25-year-old of my experience, who has no…

Q I recently looked at my super fees and insurance premiums for life, TPD and income protection. This amounted to $3000. Premiums mostly come out of my super. On top of this are other fees of about $1500. I estimate my employer contribution for super is around $8900. I am 42, earn $94,000 a year with a home loan of about $220,000. My wife earns about the same and her insurance premiums are even higher. We have two children, aged nine and 11. Needless to say I am concerned how this will impact my super down the track (current balance is $90,000). I sought the advice of a new financial planner as I was concerned about the high fees of my previous adviser. Again, I was strongly advised this was…

My partner and I rent and are considering buying an investment property. We have $10,000 saved. I am 47, earn about $65,000 a year, have $220,000 in a defined benefit super fund and have no debts. He is 42, earning about $58,000 and has a mortgage ($248,000 owing) on an investment property from which he receives $1080 a month in rent after agent fees, paying an interest-only mortgage. He has a car loan owing $10,000. A recent valuation of the property came back as $280,000, which we considered too low. I have thought about using part of my super fund as a deposit, but this would mean the fund would then become an SMSF, and I’m unsure if this would be a good idea. We really want to get into…

The Turnbull government’s proposition to raise the rate of our GST has had a mixed response. While it would help with the government’s healthcare and social services budget, many fear the higher cost of living would further disadvantage some who use these services. Several changes to the GST have been suggested and three were put to the test in a report, commissioned by the Australian Council of Social Services (ACOSS), from the National Centre for Social and Economic Modelling (NATSEM). It found that while the current GST rate of 10% raises 13.4% of its revenue from the bottom 20% of income earners, extending it to more products, or raising it by 5% to 10%, would increase the divide between rich and poor. NATSEM noted that while top-quintile households would spend…

AFTER STARTING TWO SMALL businesses, I’ve learnt from experience that maintaining the accounts is critical to staying afloat and keeping the tax office at bay. Mercifully, with the assistance of an experienced accountant and bookkeeper, along with online software packages, it’s possible to keep a neat set of books and even generate some decent cash flow. The accountant Opt for someone who has small-business experience and “speaks your language”. “The way an accountant explains things should match your level of understanding,” says chartered accountant Paul Meissner, the director of Melbourne-based 5ways Group. “They must be commercial and practical.” An accountant should present a straightforward cost structure for their services and a fixed fee often works best for many start-ups, Meissner says. A business expecting to make a few hundred thousand…

It is never too early to start the tradition of giving. Volunteering your time as a family can provide a better perspective and understanding of the world. Have a box for small change. Save $39 and buy a goat through Oxfam for a family living in poverty. Encourage children to set aside some of their pocket money to go to a charity. Some families have a 5% or 10% rule so that it is automatically deducted. Engage in school volunteering and giving programs. Some schools require their students to work with disadvantaged groups to qualify for a reference. Choose a charity as a family. Discuss the issues that concern your children. Research the charity and stick to one with a solid track record. Think outside the box. Is there a…

INVESTORS WHO ARE LOOKING FOR diversification can get a stake in a local or international property portfolio with as little as $500 through an exchange traded fund (ETF). If you have a little more, $1000, you can buy into a local award-winning property fund via the ASX’s mFund settlement service. mFund enables you to buy unlisted managed funds through your stockbroker, eliminating the paperwork and identity checks normally associated with buying unlisted funds. However, not all brokers offer the service. Real estate investing through the ASX offers you the choice of Australian real estate investment trusts (A-REITs), ETFs and mFunds. Apart from convenience, you’ll also enjoy the liquidity associated with listed investments and be able to see your entire portfolio in one place. On the downside, you’ll have to pay…

The gloom in our sharemarket may make you abandon your share investment plans but you should cast your eyes across the seas. Which offshore stocks are likely to deliver and which are not? Bloomberg has released 50 stocks to watch in 2016. The big multinationals such as Apple and Facebook are there but less well-known American and Asian companies may be more interesting. Bloomberg expects South Korean petrochemical company Lotte Chemical’s bottom line to keep improving thanks to cheaper oil prices. A surprise contender is the maker of popular energy drink Monster, whose recent merger with The Coca-Cola Company is complete and the cost savings are expected to pay off for shareholders. Energy-saving car maker Tesla makes the list but Bloomberg warns it needs stellar growth of 57%-plus each year…

THE LAZY DAYS OF SUMMER ARE here, bringing with them one year’s end and the start of another. With that in mind, Money asked SMSF specialists what they see as the most important things to do (or not to do) in 2016. The past year has been marked by market volatility and debates about super reforms – the last thing people need when planning for retirement. “Take advantage of the super rules as they stand now. They are almost too good to be true because we can see generosity shrinks over time,” says Laura Menschik, a director and SMSF adviser at WLM Financial Services. “At the moment people can make after-tax contributions of up to $180,000 a year as long as they are under 65 and working and over 65…

Many investors are worried about the troubles of the fossil fuel industry and we believe coal stocks should be firmly in the do-not-buy category. Since peaking in July 2008, the price of thermal coal has fallen 70% and supply still outpaces demand. We believe there are four structural factors causing this downturn: 1. Coal use in China fell last year for the first time since economic reforms began in 1978 and signs are that the trend will continue. This is largely due to a weaker economy but China is also the major investor in renewable energy globally. Alleviating pollution is another push factor and the Chinese government has said Beijing’s coal-fired power stations will close by 2020. 2. Japan has ramped up coal consumption but this is only transitional and…

ONMARKET APP Cost: free OS: iOS and Android This new app connects retail investors, with no fees or charges, directly to initial public offerings. It may level the IPO playing field, where institutions dominate. Each IPO comes with resources and data that provide a rationale for the float. And you can register your interest in companies yet to participate in the app by joining an OnMarket campaign. ASX APP OS: iOS Compatible with iPhone, iPad, and iPod touch. You can monitor up to 20 listed companies in your Favourites. The tab provides 20-minute-delayed prices and announcements from the past 30 days; you can opt for real-time alerts when a new one is made. Graphs or lack of them seem to bug users – hopefully one for a later edition. You’ll…

GOLD WINNERS FIDELITY AND PERPETUAL Two of last year’s gold winners, Fidelity Australian Equities and Perpetual Wholesale Share-Plus Long-Short, have placed equal first this year. Fidelity, the biggest local share fund, also won in 2013. Funds in this category have struggled to produce strong one-year returns from a volatile sharemarket but all the placegetters have produced double-digit average annual returns over three years. “Fidelity Australian Equities keeps proving why it deserves to be considered among the best,” Morningstar says. “Portfolio manager Paul Taylor finds ways to implement his signature style, focusing on backing the best business models in Australia, through all sorts of markets.” Taylor says Fidelity has two key competitive advantages when it comes to local equities: its investment team’s strength and a global network’s reach. “Every year the…

GOLD WINNER LA TROBE For seven years straight, La Trobe’s Pooled Mortgage Fund has won this award. Again, it’s the only mortgage fund deemed worthy of an award by our three judges, Lonsec, Zenith and SQM Research. The fund was awarded a 4.25-star rating this year by SQM Research, up from its previous four stars, “reflecting our continued faith in the fund’s skilled and experienced investment team”, says SQM managing director Louis Christopher. It has beaten its benchmark and peer group over the current year and since inception, he says. “The La Trobe Financial multi-award winning fund has achieved another exceptional year of growth and is Australia’s largest retail credit fund with more than $1 billion in investments serving 10,500 investors,” says Chris Andrews, vice-president and CIO of La Trobe.…

GOLD WINNERS ARROWSTREET, IFP AND MAGELLAN Another good year for international funds means that their three-year returns are particularly impressive. This year three funds take out top spot. Arrowstreet Global Equity, equal first last year, typically holds between 150 and 450 stocks. “This vehicle is founded on well-trodden investment signals such as value, momentum and quality,” Morningstar says. “Its outstanding team supports its standing as a great core global equities vehicle, in our view.” IFP Global Franchise, new to the winners’ circle, holds 20 to 40 stocks. “Its unerring trust in its investment approach and the capabilities of its seasoned team sets it apart,” Morningstar says. “Thoughtful investment process and investor-friendly practices mark it as an excellent global equities strategy.” Magellan Global, also equal first last year, ignores sector and…

GOLD WINNER VANGUARD Vanguard Australian Property Securities Index ETF has won this specialty ETF category for the fourth consecutive year, delivering a gain of 19.87% for the 12 months to September 30. Investors’ hunt for yield has held up the listed property sector, despite Australian residential property being under pressure. The sector has topped local sharemarket returns this year. Vanguard’s fund gives investors diversified exposure, spanning retail, office and industrial investments included in the S&P/ASX 300 A-REIT Index. Its distribution was 5.73% for the year. Its low investment management fee of 0.25% is a fifth the price of the average actively managed A-REIT fund. This lower fee means bigger returns for investors. Our second-placegetter, the SPDR S&P/ASX 200 Listed Property Fund, tracks the S&P/ ASX 200 A-REIT Index. In joint…

GOLD WINNER WESTPAC Westpac’s variable and fixed rates for margin loans have proved hard to beat this year. Indeed, increased competition this year means interest rates have fallen across the board. Letting you borrow against a big range of shares and managed funds, Westpac’s online investing account charges no application or establishment fees. Approved borrowers can gear their portfolios up to a maximum of 75%, with a maximum loan balance of $500,000. Individual securities have loan-to-valuation ratios starting from 30%. The loan is integrated with a Westpac online investing account, enabling customers to trade online and settle directly to their investment loan 24/7. Investors get a complete picture of their borrowings and shares in the one place. Second-placed nabtrade also has done away with establishment and service fees and offers…

GOLD WINNER CMC MARKETS For six years in a row CMC Markets has reigned as Australia’s cheapest online broker. But CMC is far from being just a discount broker, as highlighted by its third placing in this year’s Best Feature-Packed Online Broker award (see previous page). CMC has also secured Canstar’s best-value online share trading award five years in a row. Canstar said: “It’s not all about price though; CMC Markets also scored highly on features, particularly with regards to accessibility, ease of use, margin loan facility, reporting and security. It offers a number of investor events around the country each month and has some excellent online education materials. There are also more than 20 chart indicators and measurements available that can be customised to suit the needs of investors,…

SUPERSAVVY.COM.AU New to superannuation? Or do you need to find out more about an aspect – such as salary sacrifice. The website is like an encyclopedia – highly informative and easy to understand. Whether beginner or an experienced investor running a DIY fund, your first port of call should be SuperSavvy (along with Money's 2015 Super Guide). It has a handy glossary tab, which you can bookmark and refer to when needed. RATECITY.COM.AU/  SUPERANNUATION Naturally you’re serious about your retirement savings, so you’ll want to check your super fund is up there with the better performers. It’s also important to make sure you pay low fees, so they're not eating away at your hard-earned savings. RateCity can help you compare funds by performance, fees and rating (from SuperRatings). It's free,…

GOLD WINNER CARE SUPER It is the first time CareSuper has won this award. The public offer fund was originally set up for the administrative and managerial industry and now has 250,000 members and $10.5 billion under management. Good returns from a wide range of investments, including private equity, infrastructure, shares, property and fixed interest, contributed to the fund’s performance. CareSuper CEO Julie Lander says the fund’s asset consultant, JANA, owned by NAB, is a firm believer in active investment management. CareSuper has introduced member benefits such as a discounted tax return service, which provides a same-day refund of up to $1000 – $165 for a standard return. It also offers a comparison tool that allows members to see if they might be better off switching funds. If you join…

GOLD WINNER HOSTPLUS The Hostplus Indexed Balanced option wins for a fourth consecutive year. It not only has rock-bottom fees but its performance is strong for a balanced fund. The option keeps costs down by using low-cost exchange traded funds (ETFs). In addition to a flat $1.50 weekly administration cost, totalling $78 a year, there is a low annual investment management charge of 0.03%. Unlike many super funds that now impose an additional asset-based administration fee, Hostplus has kept it as a single fixed amount. Low fees mean higher returns for members and it is worth noting that the three-year return for the Indexed Balanced option is 14.6%pa, higher than the 12.4%pa for the actively managed Hostplus Balanced option, which has a higher investment management fee. The Indexed Balanced option…

GOLD WINNER INTRUST SUPER Standout income protection, life and total permanent disability (TPD) insurance have won Intrust Super the gold award for a fourth straight year. Intrust’s PayGuard income protection insurance has generous features that are hard to go past, even with a 7% rise in premiums in the past year. For a start, it pays out 90% of income for up to two years for illness or an accident as well as an additional 10% into the member’s super fund. PayGuard covers casuals in addition to full-time and part-time employees. The default waiting period is 21 days, and the benefit payment date is reduced by seven days for every two years the insurance is held – as a loyalty bonus for holding cover continuously. For example, if you have…

GOLD WINNER ONEPATH There are plenty of investment bells and whistles on OnePath's OneAnswer Frontier Pension, which has taken top spot this year, thanks to its Vanguard Growth Index option. Frontier is perfect for retirees or pre-retirees who set up an allocated pension or transition to retirement (TTR) pension and have the temperament and time and to manage their investments. They can be selected from a smorgasbord of options, including 80 managed funds, OptiMix multi-manager funds and OnePath diversified multi-manager funds. There are 16 global investment managers to choose from and even an infrastructure fund. The pension can be paid either monthly, quarterly, half-yearly or yearly into a cash management account. Frontier has estate planning features, online performance reports and some member discounts. The Vanguard Growth Index option charges a…

HOT SUBURBS FOR 2016 Adelaide: Torrensville, Thebarton, Croydon, Christies Beach, Port Noarlunga Brisbane: Kelvin Grove, Herston, Woolloongabba, Wynnum, Redcliffe Canberra: Braddon Darwin: Rapid Creek Hobart: South Hobart Melbourne: Flemington, Brunswick, Coburg, Footscray, Seaford Perth: Victoria Park, East Victoria Park, Carlisle Sydney: Tempe, St Peters, Marrickville IT PROMISES TO BE AN interesting year in property. It could be a bumper – but then again there are also reasons why this may not happen. Prices could skyrocket because interest rates are at historical lows and are forecast to drop even further. With the cost of money so cheap, people should be borrowing to buy property. But they are not and there are two main reasons prospective purchasers are keeping their hands in their pockets. First, consumer confidence is relatively low. If people…

With the rise of online banking, there are fewer reasons to visit the local branch. Roy Morgan data shows that about 1.1 million Australians use only their mobile phone or tablet for banking – triple the number of mobile-only banking customers in 2012. About a third (33.6%) use an app or website. Apps now offer a plethora of extra services, with some offering digital loyalty discounts with selected retailers and others personalised property data. Most branches now operate as more of a consulting service for customers wanting personalised advice or help with a complex issue.…

GOLD WINNERS BANK ING DIRECT NON-BANK CUA Our winners have some of the best rates on the market. ING Direct takes out its second award this year with its Savings Maximiser, which has a full promotional rate of 3.5%. (It also won Best Everyday Account.) To be paid the full rate, account holders must have a linked ING Orange Everyday Account and deposit at least $1000 a month into it. If you don’t meet this condition the rate is 2.25%pa. At such a generous rate, ING’s Savings Maximiser gives you a good incentive to keep your money in savings and discourages impulse buys. CUA’s eSaver Plus takes out our award for non-banks. It also uses strict access conditions to persuade you to leave your money alone. Don’t meet the condition…

GOLD WINNERS BANK AUSTRALIAN MILITARY BANK NON-BANK HUNTER UNITED Managing an SMSF is a demanding job with big financial and regulatory responsibilities. It’s important to have ready access to the fund’s cash resources for investment and administration costs and, if possible, flexibility of withdrawals, without the penalty of a lower or zero interest rate. Australian Military Bank’s DIY Super Saver, this year’s winner among the banks, gives SMSF investors the features of an everyday account with the profitability of a high-interest savings account. Hunter United’s Premium Online Investor Account takes out our non-bank award. If you hold a lot of assets in cash, this account, which has strict savings conditions but a better rate than many term deposits, is for you. Hunter United’s full rate is 2.9% but only if…

GOLD WINNERS BANK TEACHERS MUTUAL BANK & UNIBANK NON-BANK FIRSTMAC A longer-term deposit means taking the risk that rates will not rise for about a year. In the current economic climate, this risk is probably not high, as many in the industry expect rates to fall in the short term. With no account-keeping or establishment fees, Teachers Mutual Bank’s term deposit will help your nest egg grow a little ahead of inflation. On a deposit of $25,000 for 12 months, you would make $725. The catch is that if you need your money early there are penalties. UniBank has merged with Teacher’s Mutual and is equal first in this category, offering the same rates and features on its term deposits as its partner. Firstmac, our non-bank winner, also offers the…

GOLD WINNERS BANK ING DIRECT NON-BANK PACIFIC MORTGAGE GROUP Offset, redraw, portability and the ability to split between a fixed and a variable rate are really all you need in a home loan. The winning loans here have all those features, plus more, without a premium price tag. And it’s for this reason that they stand out from their peers. There are plenty of flexible home loans on the market but, with so many unofficial rate hikes, some lenders have simply been more competitive than others. For this reason this year’s group of placegetters bears very little resemblance to last year’s. ING Direct’s Orange Advantage takes top spot among the banks, moving up one step from its position last year. Its special offer of 3.99% is only available for new…

GOLD WINNERS BANK UBANK NON-BANK REDUCE HOME LOANS The property sector has had an interesting year. With the official cash rate at a low 2% at the time of writing, house prices have bobbed up and down throughout the country: some areas experienced record high growth while others, especially in mining areas, saw big drops. Beware, though. Low rates may make it more appealing to settle down and sign up for a mortgage but, if rates go up, you don’t want to suddenly be in over your head. Reassuringly, our winners also have the lowest rates over a six-month period. UBank’s UHomeLoan has topped the banks for the fourth year in a row. UBank offers you all the flexibility you need, with no application fees or fees for redraw and…